Airbus Increases 20-Year Demand Forecast

Airbus raised its long-term jet demand forecast on Tuesday, saying the world would need to double its fleet as cities expand and Asia's increasingly affluent middle class takes to the skies.

The European planemaker said airlines, lessors and cargo operators would need a total of 29,226 new passenger and freighter jets worth $4.4 trillion over the next 20 years.

Its latest forecast includes 28,355 passenger jets, up 3.7 percent from its previous estimate a year ago, and 871 freighters, up 1.6 percent.

The world's second largest planemaker behind rival Boeing <BA.N> insisted urban population growth would help drive demand for its flagship A380 superjumbo, but acknowledged that recently weak sales had left a "couple" of open slots in 2015 production.

Sales chief John Leahy said he would announce some new plane orders on Wednesday in China, the world's fastest growing aviation market, which is set to leapfrog the United States as an aviation market.

"In 20 years the number one market will not be the U.S., the number one market is internally within China," Leahy told a news conference.

One in four people from China travelled by plane last year; that number will rise to virtually the whole active population in the next two decades, he said.

Asia's economic performance, and the projected emergence of three billion new middle class consumers globally with some disposable income, are the main ingredients of higher demand forecasts from both Airbus and rival Boeing in recent months.

In June, Boeing revised up its own 20-year market demand forecast by 3.8 percent as the industry looks beyond the financial crisis.

Both planemakers anticipate a surge in Asian travel that is expected to keep production at their factories rising.

"The fact is when people get money they want to fly," Leahy said.

But worries over the short-term picture for emerging markets prompted the International Air Transport Association, which represents some 240 airlines, to shave its forecast for 2013 airline profits on Tuesday.

DEMAND SHIFT

Airbus hiked its forecast for demand for long-distance twin-engined passenger jets such as the upcoming Airbus A350 and Boeing's <BA.N> 787 Dreamliner by 4.3 percent to 6,779 aircraft.

The forecast for short- and medium-haul jets like the Airbus A320 and Boeing 737, which dominate production by the world's largest planemakers, was lifted by 3.7 percent to 20,242 jets.

But amid recently slow sales of its 525-seat A380 superjumbo and Boeing's 747, Airbus kept its forecast for the world's largest jetliners flat at 1,334 aircraft.

Boeing is significantly less optimistic on demand for the industry's four-engined mammoths, saying powerful twinjets such as its soon-to-be-revamped 777 have displaced many of them. Airbus says urban growth will support superjumbo sales.

Lifestyle changes around the world have helped brighten prospects for planemakers, even though many of their customers are struggling to cope with higher fuel costs.

Bob Lange, head of market and product strategy, said the number of people studying abroad had more than doubled since 2000 and the number of trips by migrant workers to families and friends was now a significant part of gauging total air demand.